Are Health Insurance Enrollees Really Beneficiaries

Your health insurance provider might refer to you as a ‘customer’, a ‘subscriber’, or even an ‘enrollee’. You might be called a ‘beneficiary’, especially if your health coverage is obtained through Medicare or Medicaid. But since when are insurance enrollees beneficiaries? Quite honestly, that doesn’t even make sense.

In a recent article published on the Healthpayer Intelligence website, contributor Kelsey Waddill referred to Medicare enrollees as ‘beneficiaries’ on multiple occasions. Note that this post is not a criticism of Waddill or her writing. She only used a word the culture has trained her to use. Nonetheless, that word has certain implications that do not apply to health insurance.

A Business Transaction

If you are not seeing the conundrum here, step outside the health insurance paradigm and imagine going to the grocery store. When you slide your debit card through the terminal to pay for $200 worth of groceries, you are not receiving benefits. You are receiving products that you paid for. That gallon of milk is not a benefit. Neither is that loaf of bread or box of diapers.

Going to the grocery store involves a business transaction. You pay a fee and in return, the grocery store gives you a product. Purchasing health insurance is only different in the sense that you are purchasing future services rather than tangible products. Either way, you are still entering a business transaction in which you pay something to get something in return.

Medicare and Medicaid

You could make the case that Medicaid recipients truly are beneficiaries because they pay very little for their coverage, if anything at all. The little bit they might contribute is paid through minimal taxation. So perhaps they are beneficiaries of a government program to which they don’t contribute much.

As for Medicare patients, they spend their entire working careers contributing to the Medicare program through FICA taxes. Once they are on Medicare, they pay for supplemental insurance to cover those things that Medicare will not. They certainly aren’t receiving any benefits. They are paying for their coverage.

Employer-Sponsored Health Insurance

Medicare and Medicaid recipients are not the only health insurance classes to be referred to as beneficiaries. If you have health insurance through your employer, you enjoy one of the most common employee benefits in the country. But the fact that your health insurance is referred to as a benefit automatically makes you a beneficiary.

On the one hand, you could say that people enrolled in employer-sponsored plans receive some benefits because they do not pay 100% of their own premiums. But then again, would they be getting the employer’s share of the premiums in their paychecks had they elected to not get health insurance? And if that’s the case, they are actually paying the full premiums themselves.

It is Industry Jargon

Perhaps the question is really one of semantics. After all, the term ‘beneficiary’ and its many iterations are standard industry jargon. Dallas-based BenefitMall, a general agency that represents insurance carriers and brokers, refers to health insurance subscribers as beneficiaries.

Their insurance brokers routinely refer to beneficiaries during open enrollment. Carriers use the term throughout their customer-facing documents. Everybody in the insurance industry knows what the word means. At least they know how the industry defines the word.

The question in all of this is whether it really makes a difference. It does to people who are very particular about the words they use. They know that language is often watered-down in order to marginalize or remove unpleasant words. Maybe we use the term ‘beneficiary’ to obscure the truth about health insurance. It is something to think about.